The Idea That Retailers Will Start to Sell a New

question 332

Multiple Choice

The idea that retailers will start to sell a new product that offers a profit margin higher than what they achieve on their traditional product line is consistent with the

• A) marketing concept.
• B) operating philosophy of most limited-line retailers.
• C) wheel of retailing concept.
• D) scrambled merchandising concept.
• E) None of these is a good answer.

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Definitions:

Shrinkflation

The process of items shrinking in size or quantity while their prices remain the same or increase.

Volume Maximization

A pricing objective that involves setting prices low to encourage a greater volume of purchases; also called penetration pricing.

Penetration Pricing

A pricing strategy aimed at entering a new market by setting a low price initially to attract customers and gain market share.

Escalator Clause

A section in a contract that provides for price increases if certain, specified conditions occur.